US Bond Yields fell sharply overnight, allaying market fears and allowing equities to continue to rally strongly. The stronger than-expected Non-Farm Payroll number and the outbreak of war in the Middle East, was not enough to destabilise the confident market rally. European inflation levels continued to tumble, in EU members states, including Greece, Hungary, Norway and the Czech Republic. The easing in the bond market allowed the US dollar to drift lower, with the EUR trading above 1.0600, while the GBP pushed up to 1.2270.
The softer reserve allowed the commodity currencies further opportunities to recover. The NZD broke back above the big figure of 0.6000, while the AUD pushed up to 0.6400 supported by some stronger local economic data. The Australian Consumer Confidence number was better-than-expected, while Building Permits jumped 7%, following some precipitous recent losses. Markets will focus on German inflation data, which is expected to show further large falls later today and the FOMC Minutes, set to be released tonight.
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